APPEAL FROM THE CIRCUIT COURT OF COOK COUNTY. No. 90 L 14998. THE HONORABLE KATHY M. FLANAGAN, JUDGE PRESIDING.
As Modified Upon Denial of Rehearing December 30, 1997. Released for Publication January 22, 1998.
Presiding Justice Cousins delivered the opinion of the court. Cahill and Leavitt, JJ., concur.
The opinion of the court was delivered by: Cousins
MODIFIED UPON DENIAL OF REHEARING
PRESIDING JUSTICE COUSINS delivered the opinion of the court:
Ben A. Borenstein & Co. (BABCO), a general contractor, filed suit against a subcontractor, Arcadia Products (Arcadia), for breach of contract arising out of Arcadia's insurance carrier's refusal to defend BABCO in an underlying negligence action. The underlying suit was brought by Gail Tanns, who was allegedly injured as a result of tripping over construction debris on a sidewalk adjacent to the project that is the subject of the subcontract between BABCO and Arcadia. BABCO and Arcadia filed motions for summary judgment with respect to the breach of contract claim. The trial court granted Arcadia's motion and denied BABCO's motion for summary judgment. On appeal, BABCO contends that: (1) the agreement to purchase insurance was enforceable; and (2) Arcadia breached the agreement to purchase insurance.
On March 2, 1989, Arcadia and BABCO entered into a subcontract agreement (Agreement) for the construction of a high-rise apartment building at 1250 North Dearborn Street. The Agreement contained a provision requiring that Arcadia indemnify BABCO for claims arising out of BABCO's negligence. The same provision required Arcadia to procure and maintain insurance at its own expense and to name BABCO as an additional insured.
BABCO reserved the right to determine whether the terms of the policy were satisfactory.
The insurance policy was to provide coverage for worker's compensation, comprehensive automobile liability insurance and comprehensive general liability insurance, including contractual liability insurance. Arcadia procured the required insurance at its own expense, naming BABCO as an additional insured, and BABCO did not indicate that the terms of the policy were unsatisfactory.
On April 6, 1990, plaintiff, Gail Tanns, was walking on Dearborn Street in the area where BABCO was constructing the apartment building and allegedly sustained injuries when she fell on the pedestrian passageway. Tanns filed a complaint against BABCO, alleging that BABCO's negligence was the proximate cause of her injuries. BABCO filed a third-party complaint against 18 subcontractors employed at the construction site, alleging various claims and seeking contribution. Seventeen of the eighteen subcontractors settled with BABCO. Arcadia did not reach a settlement agreement.
After being sued by Tanns, BABCO tendered its defense to Arcadia's insurance carrier. This tender was denied. BABCO filed a complaint against Arcadia for breach of contract for failing to procure insurance that covered BABCO for its own negligence. Both parties moved for summary judgment. The trial court denied BABCO's motion for summary judgment on the breach of contract issue, but granted Arcadia's motion for summary judgment on the breach of contract issue. BABCO appeals.
BABCO contends that the agreement to purchase insurance was enforceable. Arcadia argues that the agreement to purchase insurance was void and, therefore, unenforceable. At issue in this case is section 1 of "An Act in relation to indemnify in certain contracts" (the Act) (Ill. Rev. ...